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ADX First Crypto Miner Shows Income Following $370M IPO


In early
December, the first cryptocurrency company made its debut on the Abu Dhabi
stock market, receiving a warm welcome from investors. Two months later, Phoenix
Group UAE, specializing in the mining of cryptocurrency assets, published its
2023 report. Despite a significant drop in revenue, it achieved an
increase in net profit.

The
unaudited preliminary results released this week show that the digital asset
miner significantly increased the value of its assets compared to 2022, growing
from $230 million to $834 million.

Although
revenues for 2023 were almost three times lower than in 2022, dropping to
$288 million, the company improved its operating profit, which grew 50% to
$208 million. The net profit for the reported period was nearly $221 million, with
earnings per share modestly increasing from $0.03 reported in 2022 to $0.04.

But, where
did such a significant jump in profit come from, with a very strong limitation
of revenues? We looked for information on this in the company itself. Its
representatives stated this was due to a “one-time contract,” which distorted the company’s expected cash flows.

“We
saw significant organic growth of 20% beyond that outlier, demonstrating the
strength of our core business,” the company commented in an e-mailed
statement to Finance Magnates. “This is further reflected in our
impressive year-on-year growth in key areas such as self-mining which saw an
increase of 480%.”

The company
also mentions an increase of 119% in hosting service revenues in the report. This
was made possible by establishing cooperation with “high-net-worth individuals,”
creators of mining equipment and power supply companies.

“Our
success has been impressive, but 2024 promises to be truly
transformative,” said Seyed Mohammad Alizadehfard (Bijan), the Co-Founder
and CEO of Phoenix. “With ambitious plans and an unwavering commitment to
excellence, the group is poised to redefine success, not just in the UAE, but
on a global scale.”

Earlier
this year, the company announced that it had entered into an agreement
with Bitmain, a manufacturer of cryptocurrency miners, to purchase machines for
mining cryptocurrencies . The deal was valued at $187 million.

Shareholders Show Lack of
Optimism

Although
the Phoenix Group UAE IPO was met with a warm reception from shareholders and
the company raised $370 million, it has been on a downward trend since then.
From the highs reached on December 8, shares lost about 20% to Wednesday’s
minimums (tested after the publication of the report).

Source: TradingView

The
company’s representatives claim that the decline in valuation may be caused by
“various factors.” However, they remain convinced of the
“long-term growth prospects based on strong financials and strategic
partnerships.”

The company’s IPO came at a time when other publicly listed firms in the digital asset mining sector were starting to transition their machines away from crypto mining and towards providing computing power for the artificial intelligence industry instead. In 2022, total revenues for the cryptocurrency mining industry dropped to $6 billion, a significant drop from the all-time high of $12 billion generated in 2021.

We will
have to wait until March for the full and audited results of the company when
we will learn the exact structure of revenues, costs and the condition of the
enterprise. As Phoenix claims, the report “will further demonstrate the
underlying value” of the company.

In early
December, the first cryptocurrency company made its debut on the Abu Dhabi
stock market, receiving a warm welcome from investors. Two months later, Phoenix
Group UAE, specializing in the mining of cryptocurrency assets, published its
2023 report. Despite a significant drop in revenue, it achieved an
increase in net profit.

The
unaudited preliminary results released this week show that the digital asset
miner significantly increased the value of its assets compared to 2022, growing
from $230 million to $834 million.

Although
revenues for 2023 were almost three times lower than in 2022, dropping to
$288 million, the company improved its operating profit, which grew 50% to
$208 million. The net profit for the reported period was nearly $221 million, with
earnings per share modestly increasing from $0.03 reported in 2022 to $0.04.

But, where
did such a significant jump in profit come from, with a very strong limitation
of revenues? We looked for information on this in the company itself. Its
representatives stated this was due to a “one-time contract,” which distorted the company’s expected cash flows.

“We
saw significant organic growth of 20% beyond that outlier, demonstrating the
strength of our core business,” the company commented in an e-mailed
statement to Finance Magnates. “This is further reflected in our
impressive year-on-year growth in key areas such as self-mining which saw an
increase of 480%.”

The company
also mentions an increase of 119% in hosting service revenues in the report. This
was made possible by establishing cooperation with “high-net-worth individuals,”
creators of mining equipment and power supply companies.

“Our
success has been impressive, but 2024 promises to be truly
transformative,” said Seyed Mohammad Alizadehfard (Bijan), the Co-Founder
and CEO of Phoenix. “With ambitious plans and an unwavering commitment to
excellence, the group is poised to redefine success, not just in the UAE, but
on a global scale.”

Earlier
this year, the company announced that it had entered into an agreement
with Bitmain, a manufacturer of cryptocurrency miners, to purchase machines for
mining cryptocurrencies . The deal was valued at $187 million.

Shareholders Show Lack of
Optimism

Although
the Phoenix Group UAE IPO was met with a warm reception from shareholders and
the company raised $370 million, it has been on a downward trend since then.
From the highs reached on December 8, shares lost about 20% to Wednesday’s
minimums (tested after the publication of the report).

Source: TradingView

The
company’s representatives claim that the decline in valuation may be caused by
“various factors.” However, they remain convinced of the
“long-term growth prospects based on strong financials and strategic
partnerships.”

The company’s IPO came at a time when other publicly listed firms in the digital asset mining sector were starting to transition their machines away from crypto mining and towards providing computing power for the artificial intelligence industry instead. In 2022, total revenues for the cryptocurrency mining industry dropped to $6 billion, a significant drop from the all-time high of $12 billion generated in 2021.

We will
have to wait until March for the full and audited results of the company when
we will learn the exact structure of revenues, costs and the condition of the
enterprise. As Phoenix claims, the report “will further demonstrate the
underlying value” of the company.





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